Cape Town - South African insurer Liberty Holdings on Tuesday announced its third major management shake-up in three months, showing chief executive Thabo Dloti the door after the group had earlier posted underwhelming results for the year ended December.
Dloti took the fall and made way for Standard Bank’s chief executive for corporate and investment banking (CIB), David Munro.
Liberty is 54 percent-owned by Standard Bank.
The insurer’s earnings attributable to Standard Bank were R955 million for 2016, down 61 percent on the prior year.
In recent months, the company has been making significant changes to its senior management team.
Sim Tshabalala, a non-executive director of Liberty and joint chief executive of the Standard, said the bank acted swiftly as it felt it was important to deal with the challenges facing the insurer.
“Standard Bank and the Liberty Board have responded decisively,” he said. “Given Liberty's importance as an institution to the Standard Bank Group, our ongoing priority is to enable the company to achieve its growth by focusing on a short-term recovery plan and a longer-term strategy to reinforce its competitiveness.”
Standard Bank's profits for the year were dragged lower by the poor performance of its investment in Liberty. In its annual report for the year ended December, the bank said its performance was adversely affected by Liberty's showing.
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“Liberty’s earnings attributable to the group were R955 million for 2016, down 61 percent on the prior year. The immediate causes of Liberty’s poor performance are the weak South African economy and its effects on persistency and on the performance of Liberty’s shareholder investment and policyholder portfolios; abnormally high risk claims; operational losses and poor investment performance in Stanlib; and the negative accounting effects arising from the consolidation of the recently listed Liberty Two Degrees REIT,” the company said.
Liberty slumped the most since April 2009, after its normalised headline earnings per share tanked 38percent in the period while its net customer cash inflow nosedived by 49 percent to R7.7 billion. The company attributed this increased pressure on consumers and lower returns from investment markets.
In March, the company said it had appointed Derrick Msibi, former Alexander Forbes executive, as its chief executive of Liberty Asset Management Cluster and Stanlib SA.
His predecessor, Seelan Gobalsamy, who had replaced Dloti as chief executive of Stanlib in 2014, was in March moved to head the Emerging Markets of Liberty Group which includes Stanlib Africa.
Munro would start his new role immediately and would be replaced at Standard Bank by his deputy, Kenny Fihla.